UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                   FORM 10-QSB

[X] Quarterly  Report under Section 13 or 15(d) of the Securities  Exchange
    Act of 1934 for the quarter ended September 30, 1999.

[ ] Transaction  Report under  Section 13 or 15(d) of  the Exchange Act for the
    transaction period from ___________ to ____________.

                       -----------------------------------
                         Commission file number 0-24005
                       -----------------------------------

                                UBARTER.COM INC.
        (Exact name of small business issuer as specified in its charter)


         NEVADA                                              91-1739746
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                           Identification No.)


                         21400 International Blvd. #207
                                Seattle, WA 98198
                    (Address of principal executive offices)
                       -----------------------------------
                                 (206) 870-9290
                           (Issuer's telephone number)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act of 1934 during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.
         Yes  [X]      No  [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable date:  6,031,920 shares of Common Stock as
of November 10, 1999.


<PAGE>


                                UBARTER.COM INC.
                              For the Quarter Ended
                               September 30, 1999

                              INDEX TO FORM 10-QSB

<TABLE>
                                                                                                     Page
                                                                                                     ----
<S>      <C>                                                                                         <C>
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements:

         Consolidated Balance Sheet:
         September 30, 1999 and March 31, 1999.........................................................3

         Consolidated Statement of Operations:
         For the Three and Six Months Ended
         September 30, 1999 and 1998...................................................................4

         Consolidated Statement of Cash Flows:
         For the Six Months Ended
         September 30, 1999 and 1998...................................................................5

         Notes to Financial Statements ................................................................6

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations...........................................................9

PART II - OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds.....................................................23

Item 4. Submission of Matters to a Vote of Security Holders...........................................23

Item 6. Exhibits and Reports on Form 8-K

SIGNATURES


</TABLE>



                                       2
<PAGE>

                                UBARTER.COM INC.
                           CONSOLIDATED BALANCE SHEET
                      SEPTEMBER 30, 1999 AND MARCH 31, 1999

                                     ASSETS

                                                   September 30,      March 31
                                                       1999             1999
                                                 --------------     -----------
CURRENT ASSETS                                     (Unaudited)
   Cash and cash equivalents                      $   375,500       $   442,700
   Accounts receivable, net                           272,800           305,700
   Intercompany receivable BBE from Ubarter                 -
   Intercompany receivable Ubarter purchase                 -                 -
   Inventory                                          308,900           310,400
   Intercompany account - Seattle                           -                 -
   Other current assets                                 5,300             9,200
                                                 --------------     -----------
        Total current assets                          962,500         1,068,000
                                                 --------------     -----------

EQUIPMENT AND LEASEHOLDS, net                         394,500           383,600
                                                 --------------     -----------
OTHER ASSETS
   Goodwill                                         2,225,000         2,750,900
   Prepaid advertising                                135,000           135,000
   Notes receivable                                    22,900            23,500
   Other assets                                         1,000            28,700
                                                 --------------     -----------
                                                    2,383,900         2,938,100
                                                 --------------     -----------

        Total Assets                              $ 3,740,900       $ 4,389,700
                                                 ==============     ============

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
   Accounts payable                               $   188,900       $   111,400
   Accrued liabilities                                211,700            28,200
   Intercompany account - Seattle                           -
   Intercompany payable from Ubarter to BBE                 -                 -
   Due to BBE                                               -                 -
   Unearned revenue                                         -           186,300
   Trade dollars issued in excess of earned         2,376,300         2,147,900
   Note payable to shareholder                         66,200            66,200
   Current portion of long-term obligations           126,000            35,400
                                                 --------------     -----------
     Total current liabilities                      2,969,100         2,575,400
                                                 --------------     -----------
LONG-TERM OBLIGATIONS, net of current portion         573,949            81,600
                                                 --------------     -----------

COMMITMENTS                                                 -                 -

STOCKHOLDERS' EQUITY
   Common stock                                         6,000             5,900
   Additional paid-in capital                       3,359,351         2,649,300
   Subscribed shares                                        -                 -
   Accumulated deficit                             (3,164,700)         (909,500)
   Treasury stock                                     (13,000)          (13,000)
   Accumulated other comprehensive income,             10,200                 -
                                                 --------------     -----------
                                                      197,851         1,732,700
                                                 --------------     -----------

     Total Liabilities and Stockholders' Equity   $ 3,740,900       $ 4,389,700
                                                 ==============     ============


                             See accompanying notes.



                                       3
<PAGE>

                                UBARTER.COM INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
             THREE AND SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                                   (Unaudited)


<TABLE>
                                           Three          Three            Six              Six
                                           Months         Months          Months          Months
                                           Ended          Ended           Ended           Ended
                                          9/30/99         9/30/98         9/30/99        9/30/98
                                       ------------    ------------    ------------    -----------
<S>                                    <C>             <C>            <C>              <C>
REVENUE
    Exchange revenue                   $   499,900      $  107,700     $ 1,266,200     $  239,100
    Corporate trading revenue              239,800          17,000         380,200         34,200
                                       ------------    ------------    ------------    -----------
                                           739,700         124,700       1,646,400        273,300
                                       ------------    ------------    ------------    -----------

OPERATING EXPENSES
    Cost of corporate trading               43,000          17,000         314,700         34,200
    Sales and marketing                    147,100               -         230,400              -
    Product development                    275,300               -         486,500              -
    General and Administrative           1,322,400         443,600       2,880,700        569,600
                                       ------------    ------------    ------------    -----------
                                         1,787,800         460,600       3,912,300        603,800
                                       ------------    ------------    ------------    -----------
INCOME (LOSS) FROM OPERATIONS           (1,048,100)       (335,900)     (2,265,900)      (330,500)
                                       ------------    ------------    ------------    -----------
OTHER INCOME (EXPENSE)
    Interest expense                        (1,900)           (500)         (2,300)        (2,000)
    Interest income                          9,700          14,100          13,000         18,300
                                       ------------    ------------    ------------    -----------
                                             7,800          13,600          10,700         16,300
                                       ------------    ------------    ------------    -----------
LOSS BEFORE INCOME TAXES                (1,040,300)       (322,300)     (2,255,200)      (314,200)

INCOME TAX BENEFIT (PROVISION)                   -               -               -            600
                                       ------------    ------------    ------------    -----------
NET INCOME (LOSS)                      $(1,040,300)     $ (322,300)    $(2,255,200)    $ (313,600)
                                       ============    ============    ============    ===========
NET INCOME (LOSS) PER COMMON
    SHARE
    Basic                              $     (0.17)     $    (0.06)    $     (0.38)    $    (0.06)
                                       ============    ============    ============    ===========
    Diluted                            $     (0.17)     $    (0.06)    $     (0.38)    $    (0.06)
                                       ============    ============    ============    ===========
AVERAGE COMMON AND EQUIVALENT
  SHARES
    Basic                                6,020,733       5,683,200       5,994,533      5,227,367
                                       ============    ============    ============    ===========
    Diluted                              6,020,733       5,683,200       5,994,533      5,227,367
                                       ============    ============    ============    ===========
</TABLE>

                             See accompanying notes.



                                       4
<PAGE>


                                UBARTER.COM INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                  SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                                   (Unaudited)


<TABLE>
                                                                 September 30,        September 30,
                                                                      1999                1998
                                                               -----------------   ------------------
<S>                                                                 <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income (loss)                                            $(2,255,200)         $  (313,600)
     Adjustments to reconcile net income (loss) to net
           cash provided by operating activities
         Depreciation and amortization                                907,700                5,900
         Non-cash charges related to stock option grants               37,400              172,800
         Foreign currency loss                                         10,200                    -
         Deferred income taxes                                              -                 (600)
         Bad debts                                                     (4,200)               1,100
         Net trade dollars expended                                   143,800              (42,100)
     Change in operating assets and liablilites
         Accounts receivable                                           37,100                9,600
         Other assets                                                  31,600              (14,100)
         Accounts payable and other liabilities                        74,700               30,600
                                                               -----------------   ------------------
                                                                   (1,016,900)            (150,400)
                                                               -----------------   ------------------
CASH FROM INVESTING ACTIVITIES
     Acquisition of equipment and leaseholds                         (226,600)             (13,500)
     Note receivable collections                                          600                    -
                                                               -----------------   ------------------
                                                                     (226,000)             (13,500)
                                                               -----------------   ------------------
CASH FROM FINANCING ACTIVITIES
     Proceeds from issuance of common stock                            141,000            1,506,900
     Proceeds from notes payable                                     1,036,800               (8,900)
     Repayment of notes payable                                         (2,100)                   -
                                                               -----------------   ------------------
                                                                     1,175,700            1,498,000
                                                               -----------------   ------------------
NET CHANGE IN CASH AND CASH EQUIVALENTS                                (67,200)           1,334,100

CASH AND CASH EQUIVALENTS
     Beginning of period                                               442,700              382,600
                                                               -----------------   ------------------
     End of period                                                $    375,500         $  1,716,700
                                                               =================   ==================
SUPPLEMENTAL CASH FLOW INFORMATION
     Cash paid during the period for:
         Interest                                                 $      3,100         $      2,000
                                                               =================   ==================
         Income taxes                                             $          -         $          -
                                                               =================   ==================
NON-CASH INVESTING AND FINANCING
     ACTIVITIES
     Purchase of BBE (Windsor) stock for Trade Dollars
         and Ubarter.com stock                                    $    134,900         $          -
                                                               =================   ==================
     Prepaid advertising and scrip acquired for
         Ubarter.com Trade Dollars                                $          -         $    135,400
                                                               =================   ==================

</TABLE>

                             See accompanying notes.


                                       5
<PAGE>

                                UBARTER.COM INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1 -  BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information.
Accordingly,  they do not include  all of the  footnotes  required by  generally
accepted accounting principles for complete financial statements. In the opinion
of management,  all adjustments  (consisting of normal,  recurring  adjustments)
considered  necessary for fair presentation  have been included.  The results of
operations  for the three and six month  periods ended  September,  30, 1999 and
1998 are not  necessarily  indicative of the results to be expected for the full
year. The consolidated  financial statement combines the Company's balance sheet
as of September  30, 1999 with the balance  sheet of Barter  Business  Exchange,
Inc.  ("BBE") as of August 31, 1999.  The  consolidated  statement of operations
presents the results of  operations  of the Company for the three and six months
ended September 30, 1999, however, due to the differing  year-ends,  the results
of  operations of BBE from March 1, 1999 (the date of purchase)  through  August
31, 1999 are  consolidated  with the  Company's  results of  operations  for the
second  quarter of 1999.  Certain prior year amounts have been  reclassified  to
conform with current year presentation.  For further  information,  refer to the
financial  statements  and footnotes  included in the  company's  report on Form
10-KSB for the year ended March 31, 1999.

2 -  TRADE DOLLARS

In accordance with the guidelines  established by the  International  Reciprocal
Trade  Association,  the Company has the right to borrow from the  exchange  and
spend within the exchange systems.  Such a practice is used by barter exchanges,
worldwide, to cover inventory purchases,  capital purchases,  operating expenses
and to control the supply of trade dollars in the exchange economy.  The Company
is obligated  to provide  goods and services to clients to offset any amounts of
Trade  Dollars  issued in excess of earned.  At September 30, 1999 and March 31,
1999,  the  Company  had  expended   $2,376,300  and  $2,147,900  Trade  Dollars
respectively, in excess of the amount of Trade Dollars earned by the Company.

3 -  ACQUISITION

The  Company  previously  owned 50% of the  outstanding  common  stock of Barter
Business  Exchange  (Windsor)  Inc.  ("BBE  Windsor")  (a  subsidiary  of Barter
Business Exchange,  Inc.). On June 23, 1999,  Ubarter.com acquired the remaining
50%  ownership  for  approximately  $11,100 in cash,  $43,800  in Ubarter  Trade
Dollars,  and 20,000 shares of  Ubarter.com  common stock valued at $4.00 on the
date of purchase.  The purchase has been accounted for under the purchase method
of accounting.  Under the purchase  method of accounting,  the purchase price is
allocated  to the  assets  acquired  and  liabilities  assumed  based  on  their
estimated fair values at the date of acquisition. The excess purchase price over
the estimated fair value of the assets acquired and liabilities assumed has been
allocated to goodwill.  The Company estimated the economic useful life to be two
years.

4 -  CAPITAL STOCK

In May through August of 1999, the Company received  approximately $141,000 from
the exercise of E warrants to purchase 93,600 shares of common stock. In October
of 1998, 10,980 shares were repurchased for approximately $13,000 and classified
as treasury stock.



                                       6
<PAGE>

On June 23, 1999,  the Company  issued  20,000  shares of common stock valued at
$4.00 per share as partial  payment for equity  ownership in BBE  Windsor.  (See
Note 3.) At September  30, 1999,  the Company had  6,040,400  shares  (including
treasury  shares) of common stock issued and outstanding at a par value of $.001
per share, with total authorized shares of 25,000,000.

On July 9, 1998, the Board of Directors authorized a 2-for-1 split of its common
stock to be  distributed to  stockholders  of record at the close of business on
July 24, 1998.  All per-share and shares  outstanding  data in the  accompanying
consolidated financial statements have been restated to reflect the stock split.


5 -  INCOME (LOSS) PER SHARE

Following, is a reconciliation of the numerators of the basic and diluted income
(loss) per share for the three and six months ended September 30, 1999 and 1998:


<TABLE>
                                                          Three          Three           Six            Six
                                                         Months         Months         Months         Months
                                                          Ended          Ended          Ended          Ended
                                                         9/30/99        9/30/98        9/30/99        9/30/98
                                                      -------------  -------------  -------------  -------------
<S>                                                  <C>            <C>            <C>            <C>
Net income (loss) available to common
   shareholders                                       $(1,040,300)    $ (322,300)   $(2,255,200)    $ (313,600)
                                                      =============  =============  =============  =============
Weighted average shares                                 6,020,733      5,683,200      5,994,533      5,227,367
Effect of dilutive securities
   Options                                                      -              -              -              -
   Warrants                                                     -              -              -              -
                                                      -------------  -------------  -------------  -------------
                                                        6,020,733      5,683,200      5,994,533      5,227,367
                                                      =============  =============  =============  =============
Basic income (loss) per share (based on
   weighted average shares)                           $     (0.17)    $    (0.06)   $     (0.38)    $    (0.06)
                                                      =============  =============  =============  =============
Diluted income (loss) per share                       $     (0.17)    $    (0.06)   $     (0.38)    $    (0.06)
                                                      =============  =============  =============  =============
</TABLE>


Options and warrants to purchase  shares of common stock were  excluded from the
computation in 1999 and 1998 because their effect would be antidilutive.

6 -  STOCK OPTIONS

The Company  adopted a Stock  Option Plan (`the  Plan")  effective  June 1, 1998
whereby, nonqualified and incentive stock options for shares of common stock may
be granted to Directors,  Officers,  Employees and Consultants.  Options granted
under the Plan are not to have a life in excess of five  years  from the date of
grant  and vest 50% after 12  months,  75% after 18  months,  and 100%  after 24
months from the date grant. The provisions of the Plan allow the  administrators
to determine the vesting period of options granted.

In August and September of 1999, the Company  granted  options under the Plan to
purchase  189,500  shares of common stock at exercise  prices ranging from $2.67
per share to $4.00 per



                                       7
<PAGE>

share.  In June of 1999, the Company  granted options under the Plan to purchase
135,000  shares of common stock all at an exercise  price of $4.88 per share and
to purchase 1,000 shares of common stock at an exercise price of $2.75 per share
to certain of the Company's officers and employees.

7 -  NOTE PAYABLE

In August  1999,  funds  totaling  $1,000,000  ("the  Note")  were loaned to the
Company by Alpine Capital Group,  LLC. The Note is payable on September 1, 2002,
with interest  accruing at the rate of 5 1/2% per annum on the unpaid  principal
amount.  If the Company closes a financing or financings in the aggregate amount
of at least  $2,500,000  through  public or  private  sale of its debt or equity
securities  on or before  June 1,  2000,  the  Company  must  repay  any  unpaid
principal and interest  within 5 business  days of such closing.  If, on June 1,
2000,  there  remains  unpaid  principal  on the Note,  the Payee shall have the
option exercisable at any time thereafter, but not later than September 1, 2002,
to convert such unpaid  principal into  1,333,333  shares of common stock at the
rate of $.75 per share.  After June 1, 2000, the holder of the note may exercise
the  conversion  option any time prior to the maturity date of the note.  Alpine
Capital Group,  Inc. also received 183,333 warrants to purchase common shares at
$2.00 per share. Accordingly, the Company has allocated $451,700 of the proceeds
to the  warrants  and is  amortizing  this amount of interest  expense  from the
period of issuance to June 1, 2000.  The  effective  rate of the note payable is
20.5%. The warrants may be exercised from September 1, 1999 through September 1,
2004.

8 -  REVENUE

The following  table  summarizes  the cash and trade  (consisting of Ubarter.com
Trade  Dollars)  components  of  revenue  for the  three  and six  months  ended
September 30, 1999 and 1998:


                         Three          Three           Six            Six
                        Months          Months         Months         Months
                         Ended          Ended          Ended          Ended
                        9/30/99        9/30/98        9/30/99        9/30/98
                     -------------  -------------  -------------  -------------

Trade                  $ 337,100      $  62,100      $ 857,800      $ 134,500
Cash                     402,600         62,600        788,600        138,800
                     -------------  -------------  -------------  -------------

                       $ 739,700      $ 124,700      $ 1,646,400    $ 273,300
                     =============  =============  =============  =============


9 -  COMPREHENSIVE INCOME

As of April 1, 1999, the Company adopted SFAS No. 130,  Reporting  Comprehensive
Income,   which   established   standards  for  the  reporting  and  display  of
comprehensive loss and its components in the financial statements. Comprehensive
loss for the six month  period ended  September  30, 1999 was  $2,245,000  which
consisted of net loss and foreign currency translation adjustments. There was no
difference  between  comprehensive  income  (loss) and net income  (loss) in the
periods prior to the six months ended September 30, 1999.



                                       8
<PAGE>


ITEM 2 -  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS


Forward Looking Statements

The discussion in this report contains  forward-looking  statements,  including,
without  limitation,  statements,  which are made  pursuant  to the safe  harbor
provisions of the Private Securities  Litigation Reform Act of 1995. Although we
believe that the expectations  reflected in the  forward-looking  statements are
reasonable,  we give no  assurance  that  such  expectations  will  prove  to be
correct.  The  forward-looking  statements  involve risks and uncertainties that
affect  Ubarter.com's  operations,  financial  performance  and other factors as
discussed herein and in our filings with the Securities and Exchange Commission.

Overview

Ubarter.com   provides   business  to  business   barter  services  for  retail,
professional, media and other corporate clients through the Company's offices in
Seattle, Washington,  Toronto, Ontario, Vancouver, British Columbia and Windsor,
Ontario.  The Company manages a private barter  currency,  Ubarter  Dollars,  to
enable its members to sell their  products or  services to the  Company's  other
members for Ubarter  Dollars.  In  September  1999,  the  Company  launched  its
e-commerce solution to barter over the Internet.

Ubarter.com  was  incorporated  in  Nevada  in  September  1996  under  the name
International  Barter  Corp.  for the  purpose of  merging  with  Cascade  Trade
Association,  a Seattle based trade exchange.  Cascade Trade, founded in 1983 by
Steven  White,   Ubarter.com's   President  and  Chief  Executive  Officer,  had
approximately  500  members  in the  Seattle  area at the  time  of the  merger.
Ubarter.com  began a direct public offering of common stock after the merger and
became publicly traded in February 1998. In March 1999, the Company acquired all
of the outstanding  stock of Barter Business  Exchange  ("BBE").  In April 1999,
International Barter Corp.'s name was changed to Ubarter.com Inc. to reflect the
Company's change to an Internet-based business model.

Substantially  all of the Company's  cash revenues are derived from  transaction
fees  paid in by  buyers  and  sellers  in a  barter  transaction.  The  Company
currently  charges a 5% cash fee on both  sides  (i.e.,  to both the  seller and
buyer) of most barter  transactions.  The Company has also derives revenues from
monthly and set-up  fees  charged to members.  The Company  does not  anticipate
charging  set-up or monthly fees for members  doing  business over the Internet.
Revenues  from  transaction  fees are  billed on a monthly  basis.  The  Company
recognizes  revenue equal to the cash to be received from its commission  earned
when the  buyer has made an  unconditional  commitment  to pay and the  earnings
process has been completed by the finalization of a trade commission. Revenue is
recognized for monthly fees after the fees have been earned and collected.

A Ubarter Dollar is an accounting  unit used to record the value of transactions
as determined by the buying and selling parties in barter transactions.  Ubarter
Dollars  denote the right to receive  products or services  available from other
members or the obligation to provide goods or services to other members. Ubarter
Dollars  may not be redeemed  for cash.  When BBE was  acquired,  all of the BBE
Trade Dollars were converted to Ubarter Dollars.

Ubarter.com  uses the ratio of one Ubarter Dollar to one local  currency  dollar
(currently, United States or Canadian) in measuring and accounting for purchases
and sales. This one-to-one ratio is



                                       9
<PAGE>

consistent  with  industry   standards.   Ubarter.com  does  not  recognize  any
accounting implications if differences are noted between Ubarter Dollars and the
applicable local currency dollar prices that are within  reasonable  ranges that
might  exist  between  prices  of  similar  U.S.   dollar  or  Canadian   dollar
transactions.

Three  Months  Ended  September  30,  1999  Compared to the Three  Months  Ended
September 30, 1998

Our total  revenue in the second  quarter of fiscal 2000 was  $739,700  compared
with total revenue of $124,700 in the second quarter of fiscal 1999.  This was a
493% increase in fiscal 2000 from fiscal 1999. Revenue increased  primarily as a
result of the acquisition of BBE effective March 1, 1999.  Primarily as a result
of the BBE  acquisition,  the Company  substantially  increased  its members and
products  and services  offered to members in the second  quarter of fiscal 2000
compared with the  comparable  quarter in fiscal 1999.  Excluding  revenues from
BBE,  revenues  decreased in the three months ended  September 30, 1999 compared
with the comparable  period in 1998 as a result of concentrating a large portion
of   its   financial   and   labor   resources   on  the   development   of  its
business-to-business  e-commerce site for barter.  Much of the effort,  which in
prior years focused on increasing transaction fees from barter transactions, was
shifted to its  website  development  and to  e-commerce  strategic  development
activities in the first and second quarter of fiscal 2000.

Costs and Operating Expenses

Cost of revenue consists of the cost of inventories acquired for resale and sold
during the period. The cost of revenue for the second quarter of fiscal 2000 was
$43,000.  These costs were all  incurred by BBE. No such costs were  incurred by
the Company  because  inventory  sales were made on  consignment.  In the second
quarter of fiscal 1999, revenue costs were $17,000.

Other  costs  and  operating  expenses  (including  depreciation)  increased  to
$1,744,800  in the second  quarter of fiscal  2000 from  $443,600  in the second
quarter of fiscal 1999. The increase in operating  expenses related primarily to
recurring operating expenses incurred by BBE,  significant  increases in product
development  and general  administrative  expenses  and an increase in sales and
marketing expense in the second quarter of fiscal 2000.

Product  development  expense  increased  to $275,300  in the second  quarter of
fiscal 2000 compared with minimal  expense in the second quarter of fiscal 1999.
Product   development   expenses  consist   primarily  of  payments  to  outside
contractors  related  to  website  development  and,  to  a  lessor  extent,  of
depreciation on equipment used for development and overhead costs. Ubarter.com's
policy  is to  expense  product  development  costs  as they are  incurred.  The
increase in the second quarter of fiscal 2000 was primarily  attributable to our
development   efforts,   including  retaining  outside  consultants  related  to
technologies necessary to support an e-commerce barter site. The Company expects
to incur  approximately $1.5 million in product development costs in fiscal 2000
as our website is launched and e-commerce functionality is enhanced.

General  and  administrative  expenses  increased  to  $1,322,400  in the second
quarter of fiscal 2000 from $443,600 in the second quarter of fiscal 1999.  This
increase was primarily due to recurring  operating expenses incurred by BBE, the
addition of several key  personnel  and several new staff members in our trading
department  and additional  employees  hired to work on developing the Company's
website.  In  addition,  we  incurred  substantially  greater  legal  and  other
professional



                                       10
<PAGE>

fees,  such as  accounting  and  investor/public  relations,  as a result of our
public  company  status and to assist us in  executing  our  business  strategy.
Another  significant noncash expense in the first quarter of fiscal 2000 related
to the  amortization  of the cost of goodwill  resulting from the acquisition of
BBE.  Amortization  expense of $355,000 was recognized during the second quarter
of fiscal 2000.  Goodwill resulting from the acquisition of BBE was estimated by
management   to  be   primarily   associated   with  the   acquired   workforce,
infrastructure   and  technological   expertise.   As  a  result  of  the  rapid
technological  changes  occurring  in the  Internet  industry  and  the  intense
competition   for   qualified   professionals,   goodwill  is   amortized  on  a
straight-line basis over the estimated life of the benefit of 24 months

Sales  and  marketing  expense  primarily  consists  of  advertising  and  other
promotional costs.  Ubarter.com  expects sales and marketing expense to increase
significantly in fiscal 2000 primarily related to the promotion and marketing of
our website.  The Company currently has $135,000 of prepaid advertising which it
expects to utilize in the future promotion and marketing of its website.

Six Months Ended  September 30, 1999 Compared to the Six Months Ended  September
30, 1998

Total  revenue in the first six months of fiscal  2000 was  $1,646,400  compared
with total revenue of $273,300 in the first six months of fiscal 1999.  This was
a 502% increase in fiscal 2000 from fiscal 1999. Revenue increased  primarily as
a result of the acquisition of BBE effective March 1, 1999.  Excluding  revenues
from BBE, revenues decreased in the six months ended September 30, 1999 compared
with the comparable  period in 1998 as a result of concentrating a large portion
of   its   financial   and   labor   resources   on  the   development   of  its
business-to-business  e-commerce site for barter.  Much of the effort,  which in
prior years focused on increasing transaction fees from barter transactions, was
shifted to its  website  development  and to  e-commerce  strategic  development
activities in the first quarter of fiscal 2000.

Costs and Operating Expenses

Cost of revenue consists of the cost of inventories acquired for resale and sold
during the  period.  The cost of revenue for the first six months of fiscal 2000
was  $314,700.  These costs were all incurred by BBE. No costs were  incurred by
the Company  because  inventory  sales were made on  consignment,  as  described
above. In the first six months of fiscal 1999, revenue costs were $34,200.

Other  costs  and  operating  expenses  (including  depreciation)  increased  to
$3,597,600 in the first six months of fiscal 2000 from $569,600 in the first six
months of fiscal 1999. The increase in operating  expenses related  primarily to
recurring operating expenses incurred by BBE,  significant  increases in product
development  and general  administrative  expenses  and an increase in sales and
marketing expense in the first six months of fiscal 2000.

Product  development  expense  increased  to $486,500 in the first six months of
fiscal 2000  compared  with  minimal  expenses in the first six months of fiscal
1999.  Product  development  expenses  consist  primarily of payments to outside
contractors  related to our  website  development  and, to a lessor  extent,  of
depreciation on equipment used for development and overhead costs. Ubarter.com's
policy  is to  expense  product  development  costs  as they are  incurred.  The
increase in the first six months of fiscal 2000 was  primarily  attributable  to
our development  efforts,  including  retaining outside  consultants  related to
technologies necessary to support an e-commerce barter site.



                                       11
<PAGE>

General and  administrative  expenses  increased to  $2,880,700 in the first six
months of fiscal 2000 from $569,600 in the first six months of fiscal 1999. This
increase was primarily due to recurring  operating expenses incurred by BBE, the
addition of several key  personnel  and several new staff members in our trading
department  and additional  employees  hired to work on developing the Company's
website. In addition, the Company incurred substantially greater legal and other
professional fees, such as accounting and investor/public relations, as a result
of our  public  company  status  and to  assist  us in  executing  our  business
strategy.  Another significant noncash expense in the first six months of fiscal
2000  related to the  amortization  of the cost of goodwill  resulting  from the
acquisition of BBE.  Amortization  expense of $692,000 was recognized during the
first six months of fiscal 2000.  Goodwill resulting from the acquisition of BBE
was  estimated  by  management  to be  primarily  associated  with the  acquired
workforce,  infrastructure and technological expertise. As a result of the rapid
technological  changes  occurring  in the  Internet  industry  and  the  intense
competition   for   qualified   professionals,   goodwill  is   amortized  on  a
straight-line basis over the estimated life of the benefit of 24 months

Liquidity and Capital Resources

Since its inception in 1996,  Ubarter.com has financed its operations  primarily
from the sale of common stock and  warrants  and  proceeds  from the exercise of
those  warrants.  The operations of Cascade Trade  Association  which was merged
into Ubarter.com in November 1996 were financed  primarily through internal cash
flow.

At September 30, 1999,  Ubarter.com had a working capital deficit of $2,006,600.
Our working  capital was  $1,615,083  at  September  30,  1998.  The decrease in
working  capital  resulted  primarily  from a  $2,255,000  (deficit)  balance of
Ubarter  Dollars  issued in excess of earned that existed on the books of BBE as
of August 31,  1999.  Excluding  the  deficit  balance of Ubarter  Dollars,  the
Company had working capital of $369,700 at September 30, 1999.

In accordance with the guidelines  established by the  International  Reciprocal
Trade  Association,  Ubarter.com  has the right to borrow from its  exchange and
spend within its  exchange  system.  Such a practice is commonly  used by barter
exchanges, worldwide, to cover inventory purchases, capital purchases, operating
expenses  and to control  the supply of trade  dollars.  Ubarter.com  engages in
barter  to pay for  some  of its  operating  costs.  Ubarter.com  is  ultimately
obligated  to provide  products  and services to clients to offset any amount of
Ubarter  Dollars  issued in excess of earned.  BBE also engaged in barter to pay
for some of its operating costs. At September 30, 1999, Ubarter.com had expended
2,376,300 of Ubarter  Dollars in excess of the amount of Ubarter  Dollars earned
by it compared with 98,765  Ubarter  Dollars at September 30, 1998.  The Company
considers the current level  manageable.  These amounts are shown as a liability
on the Company's balance sheet as of September 30, 1999 and 1998.

The cash provided by financing activities was $1,175,700 in the first six months
of fiscal 2000 compared with  $1,498,000 in the first six months of fiscal 1999.
Net cash  provided by financing  activities  in the first six months of 2000 and
1999  resulted  primarily  from the exercise of warrants and proceeds from notes
payable. In August 1999, funds totaling $1,000,000 were loaned to the Company by
Alpine  Capital  Group,  LLC.  (See  Note 7 to  the  financial  statements.)  We
currently have a $67,000 revolving note payable with a bank. The note payable is
subject to annual renewal. There was a balance of $67,000 at September 30, 1999.
Borrowings under the note require security deposits of cash and cash equivalents
with the bank.  We did not have any credit  facility  in the first six months of
fiscal 2000.



                                       12
<PAGE>

The net cash used by operating activities was $1,016,900 in the first six months
of fiscal 2000 and $150,400 in the first six months of fiscal 1999.  For the six
months ended September 30, 1999,  Ubarter.com had a net loss of $2,255,200.  The
primary  adjusting  items were  $907,700 in  depreciation  and  amortization  of
goodwill and $143,800 net expenditure in Ubarter  Dollars.  During the first six
months of fiscal 2000,  there were  decreases in accounts  receivable of $37,100
and increases in accounts  payable and other  liabilities  of $74,700.  The cash
used in operating  activities of $150,400 for the six months ended September 30,
1998, reflected a net loss of $313,600.  The increase in cash used in operations
was primarily  attributable to increased personnel and product development costs
in the first six  months of fiscal  2000  compared  with the first six months of
fiscal 1999. In the first six months of fiscal 2000,  Ubarter.com  used net cash
of $226,600 for the acquisition of property, equipment and leaseholds,  compared
to $13,500 in the first six months of fiscal 1999.

Ubarter.com maintains its major U.S. cash balances at two financial institutions
located in Las Vegas,  Nevada and Seattle,  Washington  and  maintains its major
Canadian cash balances at one financial institution located in Toronto,  Canada.
Funds not required for our immediate  needs may be invested in  certificates  of
deposit, short-term government obligations, or money market funds.

As  of  September  30,  1999,  we  had  no  material   commitments  for  capital
expenditures.   Ubarter.com  leases  its  U.S.  office  facilities  in  Seattle,
Washington and leases its Canadian office  facilities in Toronto,  Vancouver and
Windsor.  Future minimum rental commitments as of September 30, 1999 pursuant to
these leases are approximately $325,000.

The Company  believes  its  existing  working  capital  and cash from  financing
activities will be sufficient to fund our operating  activities  through the end
of fiscal  year  2000,  however,  it is  currently  experiencing  a  significant
shortage in cash  resources  necessary to fund planned  expenditures  in product
development,  salaries for existing and future personnel,  and professional fees
and marketing.  Unless the Company is successful in raising additional  capital,
it may not be able to achieve its expansion goals, including further development
of its website.  There is no assurance  that the Company will have or be able to
access  sufficient  capital  or other  resources.  Ubarter.com  believes  that a
portion of its short-term  capital  resources,  up to $1,059,000 may be provided
through the exercise of outstanding E Warrants.  The E Warrants are  exercisable
at a price of $1.50  and  expire  in June  2000.  The  perceived  value of these
warrants at any given time is related to the market  price of our common  stock,
which  trades over the  counter on the OTC  Bulletin  Board.  In  addition,  the
Company  will likely seek to raise  additional  capital in the near term through
additional  equity  issuances.  If the  Company  is unable  to obtain  financing
through the  exercise of warrants or other  means,  it may be unable to meet its
working capital requirements or implement our short-term plans for expansion.

The Company  anticipates  having to raise additional  capital by equity issuance
during the next several years,  as it expects to grow at rates that will require
more funds than will be generated by its operations.  Ubarter.com  does not have
any commitments for additional  financing at this time. The Company's ability to
obtain additional  capital may be dependent on market  conditions,  the national
and international  economies and other factors outside its control.  If adequate
funds are not available or are not available at acceptable  terms, the Company's
long-term  ability to finance  its  expansion,  develop or enhance  services  or
respond to competitive pressures would be significantly limited.



                                       13
<PAGE>

Discussion of the Year 2000 Issue

Background.  Many  computer  programs  have been written using two digits rather
than four to identify the year. Any computer  programs that have  date-sensitive
software  may  recognize a date using "00" as the year 1900 rather than the year
2000.  Systems that do not properly  recognize  this  information  could fail or
generate  miscalculations  causing disruptions of operations,  including,  among
other things, a temporary inability to process  transactions,  send invoices, or
engage in  similar  normal  business  activities.  This  situation  is  commonly
referred as the year 2000 or "Y2K" problem.

Scope and Impact of Y2K on Ubarter.com.  Ubarter.com  utilizes both  proprietary
software and software  provided by outside  vendors which may be impacted by the
Y2K problem.  The operation of our trade  exchange is dependent  upon the proper
functioning  of its computer  software.  Management  has assessed the  potential
impact of the Y2K issue on  Ubarter.com  and does not believe that our business,
operations or financial  condition will be materially  impacted by the Y2K issue
as it relates to our  proprietary  software.  Furthermore,  it is expected  that
potential  impact of third parties'  failure would not have a material impact on
Ubarter.com's business, operations or financial condition.

Remediation plans. Our principal software vendor has completed  reprogramming of
its proprietary software. With respect to software supplied by third parties, we
have determined that such software is already Y2K compliant or will be compliant
well  before the year 2000 or,  alternatively,  that any such  software  will be
replaced at a cost which is not material to our results of operations.

Risk Factors

You should  carefully  consider the  following  factors,  among  others,  as you
evaluate the Company and the  forward-looking  statements  the Company  makes in
this document.  Any of these risk factors could  materially and adversely affect
the   Company's   business,    financial   condition   or   operating   results.
Forward-looking  statements are subject to a number of risks and  uncertainties.
The  Company  urges you to note the  description  of its plans,  objectives  and
strategies for future operations, assumptions underlying these plans, objectives
and strategies and other  forward-looking  statements included in the "Business"
section in this  document.  These  descriptions  and statements are based on the
Company's  current  expectations.   The  Company's  actual  results  may  differ
significantly from the results discussed in these forward-looking  statements as
a result of certain  factors,  including  those set forth in this "Risk Factors"
section and elsewhere in this document.  The Company undertakes no obligation to
update  publicly  any  forward-looking  statements  for any reason,  even if new
information  becomes available or other events occur in the future.

The  Company  may face  difficulties  in  achieving  its growth  strategy in its
markets.  You should consider the risks and  difficulties the Company expects to
encounter as it attempts to execute its business strategy, including the rapidly
evolving nature of the commercial  barter market and the Internet market.  These
risks include uncertainties about its ability to:

     *    attract a larger number of members to execute barter  transactions  on
          its  offline  trade  exchange  and on its  e-commerce  barter  website
          launched in September 1999;

     *    increase  awareness  of the  benefits of  bartering in general and the
          specific services it can provide;



                                       14
<PAGE>



     *    strengthen the loyalty of its existing members;

     *    successfully  implement  its plan to introduce  its online  e-commerce
          barter website;

     *    respond effectively to competitive pressures;

     *    continue to develop and upgrade its technology;

     *    attract, integrate, retain and motivate qualified personnel;

     *    respond effectively to increased business operation demands.

The Company may be unable to  accomplish  one or more of the above,  which could
cause its  business to suffer.  In  addition,  accomplishing  one or more of the
above could be very costly, which could harm its financial results.

Funds may be  insufficient  to finance its plans for growth and its  operations.
The Company's  existing working capital and cash from financing  activities will
not be  sufficient  to allow it to execute  its  business  plan,  including  the
further  development  and  implementation  of its e-commerce  barter website and
acquisition  of other  barter  exchanges,  and meet the demands for its services
during  fiscal  year 2000.  In August  1999,  the  Company  raised $1 million of
short-term  financing,  however,  it still needs to raise additional  capital to
finance  its  expansion  goals  and  operations  and  to  repay  the  short-term
financing.  The  Company  believes a portion  of its  capital  resources,  up to
approximately  $1,059,000,  will come from the exercise of outstanding warrants.
Some of these  warrants have an exercise  price of $1.50 and expire in June 2000
and some have an  exercise  price of $2.00 and  expire in  September  2004.  The
perceived  value of these  warrants  at any given  time is related to the market
price of the Company's  common stock,  which trades over the counter through the
OTC  Bulletin  Board.  In addition,  the Company is seeking to raise  additional
capital in the near term through  additional equity or debt issuances.  If it is
unable to obtain the expected  portion of its financing  through the exercise of
warrants or other financings,  it may not be able to successfully  implement its
short-term  or  long-term  plans for  expansion  or to meet its working  capital
requirements. In addition, if it is unable to repay the $1 million of short-term
financing  by June 1, 2000,  the lender would have the right to convert the loan
into 1,333,333  shares, or approximately 22% of the Company's common stock based
on the number of shares  outstanding  at September 30, 1999.  Excluding  accrued
interest owing on the loan at the time of conversion,  the conversion  price per
share of common stock would be $.75. Accordingly, current shareholders would, in
the  event  of such a  conversion,  experience  significant  dilution  of  their
investment  in  Ubarter.com.  The full  development  and  implementation  of the
Ubarter.com  website will require additional  resources.  The Company may not be
able to obtain the working  capital  necessary  to develop  its  website  fully.
Furthermore,  the website may not produce  material revenue even if successfully
developed.

Additionally,  the Company may not be successful in its efforts to acquire other
regional trade exchanges.  One of the assumptions in making acquisitions is that
the  Company  will be able  to use  its  common  stock,  rather  than  cash,  as
consideration for any purchase. This assumption may prove to be incorrect. If it
does use  shares of its  common  stock to make  acquisitions,  the  issuance  of
additional shares could be dilutive. Even if it succeeds in its expansion plans,
it may  experience  rapid growth that  requires  additional  funds to expand its
operations and  organization.  Working  capital  requirements in the foreseeable
future will depend on a variety of factors  including  capital  requirements  to
implement and adjust the business plan.

The Company does not have  current  commitments  for  additional  financing.  It
intends to explore a number of options to secure alternative financing including
the issuance of additional  equity.  It might not succeed,  however,  in raising
additional equity capital or in negotiating and obtaining



                                       15
<PAGE>

additional  and acceptable  financing  when it is needed.  The ability to obtain
additional  capital may depend on market  conditions  (including  the market for
Internet  stocks),  national and global  economies and others factors beyond the
control of the  Company.  If adequate  capital  were not  available  or were not
available on  acceptable  terms at a time when the Company needs it, its ability
to execute its  expansion  plans,  develop or enhance its services or respond to
competitive pressures would be significantly impaired.

The  Company  faces   competition  from  numerous  barter  exchanges  and  other
companies.  There are  hundreds of  independent  barter  exchanges in the United
States  and  Canada,  some of which may have  similar  plans  for  international
expansion  and  development  of  online  e-commerce  barter  sites.  Some of the
established entities in the barter industry may have more operating  experience,
larger  member  bases or  greater  financial,  marketing,  technical  and  other
resources.  It is possible that a group of independent  barter  exchanges  could
join forces to create a large national or  international  barter company with an
online  e-commerce  barter  site.  Consequently,   the  Company  will  encounter
competition  in its  efforts to expand  our  business  and to acquire  desirable
independent trade exchanges.

The Company  believes the more market  penetration  it achieves,  the higher the
barrier to entry  will  become for  anyone  contemplating  a similar  e-commerce
solution for barter. The Company faces the risk,  however,  that existing or new
competitors  may develop  technologies  or services or strategic  alliances  and
affiliations  that  makes  its  services  less  marketable  or  less  useful  or
desirable.  Furthermore, the Company may not be able to successfully enhance its
services,  develop  new  services  or lower  costs  when  and as it needs  them.

Similarly,  the Company  expects to face  competition  in its efforts to develop
Ubarter.com  into  a  premier   e-commerce   barter  website.   The  market  for
Internet-based  services and products is relatively new, intensely  competitive,
rapidly  evolving  and  subject  to rapid  technological  change.  A  number  of
companies that have expertise in developing  online commerce and in facilitating
person-to-person  or  business-to-business   interaction,   could  be  potential
competitors if they elected to enter the barter business. Certain Internet-based
companies with unique  purchasing or sales models such as eBay and Priceline.com
have  significant  technical,  financial  and  marketing  resources and could be
potential   competition  for  Ubarter.com.   These  companies  would  be  strong
competitors if they decided to enter the barter business.

A key  component  of the  Company's  future  revenue  growth  depends on the its
ability  to develop  and  successfully  implement  a quality  e-commerce  barter
website.  The Company intends to develop  Ubarter.com into a premier  e-commerce
barter  website where  businesses  can buy and sell  products and services.  The
Company may not be successful  in its plans to  implement,  maintain and develop
usage of the  website.  The  website may  encounter  technical  difficulties  in
implementation.  Technical  problems  may  cause  delays or  require  additional
expenditures.  For the website to be  perceived  as a viable  marketplace  and a
replacement  for or  supplement  to current  trade  exchanges,  the website must
provide  accurate  and  timely  information  on a  consistent,  easy-to-use  and
reliable basis. Other measures of quality of the Company's website include:

     -    the level of representative member participation;

     -    a sufficient  range and  availability of products and services offered
          on its website;

     -    its ability to service high response rates for members; and



                                       16
<PAGE>

     -    timely  posting of  changes  and  modifications  to the  inventory  of
          members and products and services offered over its website.

The Company  expects to derive  revenues  in the near term from the  Ubarter.com
website.  The success of its business will depend on end-user  acceptance of its
online services. Its success will also depend on its ability to design, develop,
test and support  new  services  and  enhancements  on a timely  basis that meet
changing customer needs and our ability to respond to technological developments
and emerging industry  standards.  It may be unable to maintain adequate quality
control  procedures,  develop and market new services and enhancements that meet
changing  customer needs, or respond to technological  developments and emerging
industry  standards.

In an effort to develop new and enhanced services and features for the Company's
website, it may alienate current users or experience technical difficulties. The
Company  believes  its website  will be more  beneficial  to members by allowing
members to access  products  and  services  online 24 hours a day,  seven days a
week,  and execute  transactions  online.  Accordingly,  it intends to introduce
additional or enhanced  services and features designed to attract new members to
its website  while  retaining  current  members.  If it  introduces  services or
features that do not function  properly or that current  members do not perceive
favorably, they may not continue to visit the website. Members may also choose a
competitor's  site over ours. The Company may also experience  difficulties that
could  delay  or  prevent  it  from   introducing   new  services  or  features.
Furthermore,  these services or features may contain errors or problems that the
Company may discover after it has already  introduced them. The Company may need
to modify  significantly the design of these services or features on its website
to correct these errors.  Errors could lead to  significant  dissatisfaction  of
members and result in adverse publicity.

The Company's  growth and success depend on continued growth in barter industry.
Industry  sources,  as well as the Company's  experience,  indicate that for the
last several  years the  commercial  barter  industry has  experienced  a steady
growth.  These sources have attributed the growing appeal of the barter industry
among  business  owners to increasing  competitive  pressures,  the existence of
surplus  inventory,  unproductive  assets,  excess  capacity  and the ability to
generate new sales and reach new customers while conserving cash.  Nevertheless,
the Company  believes that there has been low penetration by the barter industry
into the market of potential business  customers.  Although the Company is aware
of no factors that would lead it to conclude that the commercial barter industry
will not continue to grow at a steady rate,  it is possible this growth will not
continue.  If the growth of the barter  industry were to decline,  however,  the
Company would expect to face heightened  competition with weakened profitability
and a reduced  share of the barter  market,  which  could  materially  adversely
affect its business,  results of operations and financial condition.

The  Company  may be unable to  effectively  manage its  growth.  As the Company
continues to expand its level of operations,  it will need an effective planning
and  management  process to implement its business plan  successfully.  With the
introduction  of its new  website,  it may  experience  periods  of  significant
expansion of its business. Depending on the amount and timing of any increase in
business,  this expansion  could place a strain on management,  operational  and
financial resources. Some areas that could be put under strain by growth include
customer  support,  customer  billing and website support and  maintenance.  The
Company has management, operating and financial systems in place, and it intends
to continue its efforts to improve these systems. There is a risk, however, that
such systems may be inadequate to support its existing and future  operations or
that hiring,  training and managing new employees will be more difficult then it
anticipates.



                                       17
<PAGE>

The Company has historical  losses and anticipates  future losses in the initial
stage of implementing  its business  strategy.  The Company is incurring  losses
from its  operating  activities.  As of September  30, 1999,  the Company has an
accumulated deficit of $3,164,700. It expects to increase its operating expenses
in an effort to expand its  marketing,  and it expects to increase  its level of
expenditures  to further  develop online barter  capability.  These  anticipated
increases in operating  expense  levels and  developmental  costs will adversely
affect  operating  results.  The Company  expects that it will continue to incur
losses  during  fiscal  year  2000  and  beyond.  Further,  if  it  successfully
accomplishes its plan of acquiring  existing trade exchanges,  it believes these
acquisitions could result in additional operating losses and negative cash flows
until the acquisitions are  successfully  integrated into its operations.  If it
acquires other trade  exchanges,  period-to-period  comparisons of its financial
results may not be meaningful,  and you should not rely on them as an indication
of future performance.

The Company may not be able to integrate  successfully  the operations  from its
acquisition of Barter  Business  Exchange or from any future  acquisitions.  The
Company may not be successful in integrating  the operations of Barter  Business
Exchange  or from any future  acquisitions.  The BBE  acquisition  was its first
significant  acquisition.  The Company  therefore  has limited  experience  with
completing and integrating acquisitions. There is risk that it will be unable to
integrate  successfully  the  operations  of Barter  Business  Exchange with its
existing  business or that the anticipated  benefits of the acquisition,  or any
future acquisitions, may not be realized. Part of the business strategy includes
growth by acquisition,  so the Company  expects to pursue other  acquisitions in
the  future.  It  may  be  unable  to  identify,  negotiate  or  finance  future
acquisitions.   The  Barter  Business   Exchange   acquisition  and  any  future
acquisitions  present many risks and  uncertainties  generally  associated  with
acquisitions including:

     -    adverse   effects  on  its  reported   results  of   operations   from
          acquisition-related charges and amortization of goodwill and purchased
          technology;

     -    increased fixed costs, which could impact profitability;

     -    increased debt;

     -    inability  to  maintain  the  key  business   relationships   and  the
          reputation of the acquired businesses;

     -    potential  dilution  to  current  shareholders  from the  issuance  of
          additional equity securities;

     -    difficulties integrating operations, personnel, technologies, products
          and information systems of the acquired businesses;

     -    maintenance of our standards, controls, procedures and policies;

     -    becoming  responsible  for  significant  liabilities  of  companies we
          acquire;

     -    diversion of management's attention from other business concerns; and

     -    potential loss of key employees of acquired businesses.

The Company is currently  facing all of these challenges in some degree relating
to  the  BBE  acquisition.   The  Company  does  not  have  any  understandings,
commitments or agreements with respect to any other material acquisition, and no
material  acquisition is being pursued,  as of the date of this prospectus.

The Company is dependent on key personnel. The successful  implementation of its
business plan and the overall  success of its business will depend on the skills
and  efforts of its  management  personnel  and, to a large  extent,  the active
participation of Steven White, its Chief Executive



                                       18
<PAGE>

Officer and President and Bob Bagga, its Chief Operating Officer, as well as its
other  executive  officers  and  key  employees.   The  Company  has  employment
agreements  in place with  certain key  employees  and  management.  It also has
key-man insurance covering the life of Mr. White in the amount of $1 million. It
does not have key man life  insurance on other  executives.  Its future  success
will depend on our ability to attract,  train,  retain and  motivate  technical,
managerial,  marketing and customer  support  personnel.  Competition  for these
personnel  may  be  intense,   particularly   for  individuals  with  e-commerce
experience.  The Company  provides stock options,  which further serve to retain
and  motivate  key  employees.  It  nevertheless  faces the risk that it will be
unable to  attract,  integrate,  retain and  motivate  qualified  employees.

An  established  public  trading  market for the Company's  securities  does not
exist.  The  Company's  common stock trades on the OTC Bulletin  Board.  The OTC
Bulletin  Board is an electronic  quotation  medium used by  subscribing  broker
dealers to reflect dealer quotations on a real-time basis. The  over-the-counter
market  provides  significantly  less  liquidity  than the Nasdaq Stock  Market.
Quotes  for  stocks  included  on the OTC  Bulletin  Board are not listed in the
financial  sections  of  newspapers  as are those for the Nasdaq  Stock  Market.
Further,  quotation  entries on the OTC  Bulletin  Board may reflect an unpriced
indicator of interest  (such as "bid wanted" or "offer  wanted"  indicators)  on
unsolicited non-dealer interest.  Therefore, prices for securities traded solely
on the OTC  Bulletin  Board may be  difficult  to obtain,  and holders of common
stock may be  unable  to  resell  their  securities  at or near  their  original
offering price or at any price.

The National  Association of Securities  Dealers has recently enacted Rules that
limit  quotations  on the OTC Bulletin  Board to  securities of issuers that are
current in their reports filed with the Securities and Exchange Commission. This
rule becomes  effective for the Company's stock in May, 2000. The intent of this
rule is to make  reliable  and current  financial  and other  information  about
issuers  available to the investing  public. At this time, the impact these rule
changes  may have on the  Company's  securities  or the  trading  of  securities
generally on the OTC Bulletin  Board  cannot be  determined.  If at any time the
Company's  securities  are not  included  on the OTC  Bulletin  Board and do not
qualify  for  Nasdaq,  quotes for the  securities  may be  included in the "pink
sheets" for the over-the-counter market. This trading market is even less liquid
than the OTC Bulletin  Board and holders of common stock may be unable to obtain
any  quotations  for  securities.

"Penny stock"  regulations  impose  certain  restrictions  on  marketability  of
securities.  The SEC has  adopted  regulations  that  generally  define a "penny
stock" to be any equity  security  that is not  traded on a national  securities
exchange  or Nasdaq and that has a market  price of less than $5.00 per share or
an exercise price of less than $5.00 per share,  subject to certain  exceptions.
The definition  excludes the securities of an issuer that meets certain  minimum
financial requirements.  Generally,  these minimum thresholds would be met by an
issuer  with  net  tangible  assets  in  excess  of $2  million  or $5  million,
(depending  on whether the issuer has been  operating  continuously  for less or
more than three  years) or by an issuer  with  "average  revenue" of at least $6
million  for the last  three  years.

As long as the Company does not meet the relevant financial requirements and its
common stock is trading at less than $5.00 per share on the OTC Bulletin  Board,
its  securities  are  subject  to the penny  stock  rules.  These  rules  impose
additional sales practice  requirements on broker-dealers who sell the Company's
securities to persons other than established  customers and accredited investors
(generally,  investors with a net worth in excess of $1,000,000 or an individual
annual income  exceeding  $200,000,  or, together with the investor's  spouse, a
joint income of $300,000).  For  transactions  covered by the penny stock rules,
the broker-dealer must make a special suitability determination for the purchase
of such  securities  and have received the  purchaser's  written  consent to the
transaction prior to the purchase.  Additionally, for any non-exempt transaction
involving  a penny  stock,  the rules  require,  among  other  things,  that the
broker-dealer



                                       19
<PAGE>

deliver an SEC mandated  risk  disclosure  document  relating to the penny stock
market  and  the  risks  associated  therewith  prior  to the  transaction.  The
broker-dealer   must  also   disclose  the   commission   payable  to  both  the
broker-dealer and the registered  representative  as well as current  quotations
for  the  securities.  If  the  broker-dealer  is  the  sole  market-maker,  the
broker-dealer must disclose this fact and the  broker-dealer's  presumed control
over the  market.  Finally,  the  broker-dealer  must  send  monthly  statements
disclosing  recent price information for the penny stock held in the account and
information on the limited market in penny stocks. Consequently, the penny stock
rules may restrict the ability of  broker-dealers to sell our securities and may
affect the ability of our shareholders to sell their securities in the secondary
market.  Volume of shares eligible for sale may depress the market price.

Of the 6,029,420  shares of common stock  outstanding  as of September 30, 1999,
the Company issued 1,439,400 under an exemption from the registration provisions
of the  Securities  Act of 1933 under Rule 504 of  Regulation  D. These Rule 504
shares are  eligible for resale,  without  limitation,  in the open market.  The
Company issued the remaining  4,590,020  shares in private  transactions.  These
4,590,020 shares are restricted  securities within the meaning of Rule 144 under
the Securities Act of 1933. Of these shares,  1,916,000 shares (or approximately
32% of the shares currently  outstanding) are being registered for resale by the
selling  shareholders  pursuant  to the  registration  statement  to which  this
prospectus  relates.  In addition,  the remaining 2,674,020 shares of our common
stock are  currently  eligible  for  resale in the open  market,  subject to the
volume and other  conditions of Rule 144. There are no contractual  restrictions
on  the  resale  of  the  outstanding  common  stock,  except  for  some  volume
limitations on the 150,000 shares issued in connection with the BBE acquisition.
In addition,  the Company filed a registration statement on Form S-8 registering
a total of 1,825,040 shares of common stock subject to outstanding stock options
or reserved for issuance under our stock option plan.  Shares  registered  under
the Form S-8 registration statement will, subject to Rule 144 volume limitations
applicable to affiliates,  be available for sale in the open market, unless such
shares are subject to vesting restrictions. The sale in the public market of the
shares to be registered  for resale  pursuant to the  registration  statement to
which  this  prospectus  relates  as  well  as  the  restricted  shares,  or the
perception that these sales may occur, may depress  prevailing  market prices of
the common stock.  These factors may also make it more difficult for us to raise
funds through future offerings of common stock.

The Company will depend on the continued  utility of the Internet and technology
for its e-commerce barter site. The performance of the Ubarter.com  website will
be dependent on the  successful  operation of the Internet and on certain  third
parties and services  (such as Internet  service  providers,  Internet  backbone
providers and Web browsers).  Users may experience  difficulties  resulting from
system failures unrelated to the Company's internal systems and services. If the
Internet were to become  regularly  unavailable  for many hours at a time, or if
its ability to handle traffic loads were to deteriorate enough to cause frequent
unavailability  or slow  response  times,  there  would be less  traffic  to its
website.  Furthermore,  the  perception  of the  quality of its  services  could
suffer.  To date,  the Internet has proven highly  resilient  and  responsive to
rapid  growth in its use, and many of the world's  telecommunications,  software
and hardware  companies are continually  investing in capacity and improvements.

The Company's  Internet  services  will be designed  around  certain  standards,
including, for example, Internet security standards.  Current and future success
of its services may become subject to additional  industry standards as Internet
commerce rapidly evolves. As a result its business may incur additional costs of
unknown  proportions  as it is  confronted  with new  technology  standards.  In
addition,  it may not be successful in its efforts to enhance existing  services
and to develop, introduce and market new services. Furthermore, its enhancements
and new services may not adequately meet the requirements of the marketplace and
achieve market



                                       20
<PAGE>

acceptance.  As the Internet  develops,  it is possible that  incompatibility or
lack of  appropriate  features  could impact its business.

The Company  expects sales of its services will depend in large part on a robust
industry  and  infrastructure  for  providing  Internet  access and carrying the
rapidly  increasing  Internet  traffic.  Certain critical issues  concerning the
commercial use of the Internet (including capacity to handle projected increases
in traffic,  security,  reliability,  cost,  ease of use,  access and quality of
service)  remain  unresolved  and may  impact the growth of  Internet  use.  The
Internet  may  not  prove  to be a  viable  commercial  marketplace  because  of
inadequate  development  of the  necessary  infrastructure,  such as a  reliable
network backbone or timely development of complementary  products,  such as high
speed modems. Because global commerce and on-line exchange of information on the
Internet and other  similar open wide area  networks are new and  evolving,  the
Company  cannot  predict  with  any  assurance  whether  the  infrastructure  or
complementary  products  necessary  to make the  Internet  a  viable  commercial
marketplace will continue to be developed.  Even if the necessary infrastructure
and complementary products are developed, the Company cannot predict whether the
Internet  will  remain  a  viable  commercial  marketplace.   In  addition,  the
widespread  adoption  of new  Internet  or  telecommunications  technologies  or
standards could require the Company to make  substantial  expenditures to modify
or adapt its  services.  In this case,  the new  Internet or  telecommunications
services or  enhancements  that it offers  could  contain  design flaws or other
defects.  Although it expects to be  responsive  to changes in the  Internet and
technology,  it may not be successful in achieving widespread  acceptance of its
services before  competitors  offer services with speed and performance equal to
or greater  than those of the  Company.

Security  and  privacy  concerns  could  subject  the  Company to  liability  or
otherwise deter consumers from using its Website.  The Company's members are now
able to conduct online barter transactions and it could be subject to litigation
and liability if third  parties were able to penetrate  its network  security or
otherwise  misappropriate its users' personal information.  This liability could
include claims for  unauthorized  barter  transactions,  impersonation  or other
similar fraud claims. It could also include claims for other misuses of personal
information,  such as for  unauthorized  marketing  purposes.  In addition,  the
Federal Trade  Commission  and certain  states have been  investigating  certain
Internet  companies  regarding  their use of personal  information.  The Company
could incur additional expenses if new regulations regarding the use of personal
information are adopted or should government  agencies choose to investigate the
Company's privacy practices.

The need to securely  transmit  confidential  information  over the Internet has
been a significant  barrier to electronic  commerce and communications  over the
Internet.  Any  well-publicized  compromise of security  could deter more people
from using the  Internet or from using it to conduct  transactions  that involve
transmitting confidential information,  such as barter transactions and personal
information. Internet security concerns could frustrate the Company's efforts to
grow its member base. It may also incur significant costs to protect against the
threat of security breaches or to alleviate problems caused by such breaches.

The  Company  faces risks from  potential  government  regulation  of the barter
industry and of the Internet.  The barter  industry is not currently  subject to
direct  regulation by any government  agency,  other than regulations  generally
applicable to businesses.  Certain tax regulations require U.S. barter exchanges
to file with the Internal Revenue Service, on an annual basis, the totals of the
barter  sales of their  members.  Similarly,  there  are  currently  few laws or
regulations  governing  usage of the  Internet.  It is possible that a number of
laws and  regulations  may be adopted  with  respect to the  Internet,  covering
issues  such  as  user  privacy,  taxes  and  the  pricing,  quality  and  other
characteristics  of products and services.  The adoption of laws or  regulations
applicable to



                                       21
<PAGE>

our business could hinder the growth of the barter industry or the Internet.  As
a result,  these  regulations  could  cause a  decrease  in the  demand  for our
services  and an increase  in our cost of doing  business  or  otherwise  have a
material  adverse  effect on our business,  prospects,  financial  condition and
results  of  operations.  Furthermore,  the  applicability  to the  Internet  of
existing  laws in  various  jurisdictions  governing  issues  such  as  property
ownership,  sales and other taxes,  libel and personal  privacy is uncertain and
may take years to resolve.

The  Company's  systems  may be subject to Year 2000  problems.  The Company has
reviewed its own information  technology and other technology  systems to assess
and  remediate  any Year 2000  problems.  It  believes  all of its  systems  and
software are Year 2000 compliant.  It cannot,  though, be sure that its internal
systems will function  properly in the Year 2000. See  "Management's  Discussion
and Analysis of Financial  Condition  and Results of Operations -- Discussion of
the Year 2000 Issue."

The  Company's  quarterly  operating  results  are subject to  fluctuations  and
seasonality.  The Company's revenue and operating results may vary significantly
from  quarter to quarter as a result of a number of  factors,  some of which are
outside of its control. These factors include:

     -    the  commitment of members to the general  concept of bartering and to
          the concept of bartering online through its website;

     -    the budget cycles of its members;

     -    the attractiveness to members of its bartering services;

     -    changes in costs that it incurs to attract and retain members;

     -    changes  in its  fees or the  fees of its  competitors  for  bartering
          services;

     -    the introduction of new services by the Company or by its competitors;

     -    unexpected   costs  and  delays  relating  to  the  expansion  of  its
          operations;

     -    the occurrence of technical difficulties and system downtime; and

     -    general economic and market conditions.

The  Company   does  not  believe  its  revenue  will  be  subject  to  seasonal
fluctuations  as a result of general  patterns of retail  advertising and direct
marketing,  which are  typically  higher  during  the fourth  calendar  quarter.
Expenditures by its members may though tend to be cyclical,  reflecting  overall
economic conditions,  member buying patterns and changing marketing  strategies.

As a result of the above factors,  revenues and operating  results are difficult
to forecast, and you should not rely on period-to-period  comparisons of results
of operations as an indication of the Company's future performance.  The Company
may incur a significant  shortfall in revenues in relation to its  expectations.
In  addition,  in  future  periods  its  operating  results  may fall  below the
expectations  of public market  analysts and investors.  Should this occur,  the
market price of its common stock would likely decline.



                                       22
<PAGE>

PART II -OTHER INFORMATION

Item  2.  Changes in Securities and Use of Proceeds

(1)  During the three  months  ended  September  30,  1999,  "E"  warrants  were
exercised at the exercise  price of $1.50 per share.  These  issuances of common
stock underlying the warrants were exempt from registration under the provisions
of Section  4(2) of the  Securities  Act and or Rule 506  promulgated  under the
Securities  Act. As  shareholders  and warrant  holders,  these  individuals and
entities had  pre-existing  relationships  with the Company,  had  knowledge and
information  about the  business  of the  Company  and had  access  to  publicly
available and other information  about the Company.  These exercises of warrants
did not involve the use of general solicitation or advertising.

(2)  Pursuant to the Company's 1988 Stock Option Plan, the Company granted stock
options to certain  employees  to purchase  an  aggregate  of 189,500  shares of
common stock at exercise  prices ranging from $2.67 per share to $4.88 per share
and an aggregate  of 1,000 shares of common stock at an exercise  price of $2.75
per share. The granting of stock options did not require  registration under the
Securities Act.

Item 4. Submission of Matters to a Vote of Security Holders

The annual meeting of shareholders of Ubarter.com Inc. was held on September 30,
1999.  Shareholders  holding  4,673,398  shares,  or  approximately  79%  of the
outstanding  shares,  were  represented  at the  meeting  by proxy or in person.
Matters submitted at the meeting for vote by the shareholders were as follows:

a.   Election of Directors

The  following  nominees  were  elected  to serve  as  members  of the  Board of
Directors until the annual meeting of shareholders in 2000 or until such time as
a successor may be elected.

                               TABULATION OF VOTES

                                     FOR              WITHELD
                                     ---              -------
Steven M. White                   4,672,698             700

Eric M. Best                      4,672,698             700

John A. Wade                      4,672,698             700

b.   Approval of amendment to the Company's articles of incorporation

Shareholders  approved an amendment to the Company's  articles of  incorporation
creating  10,000,000 shares of preferred stock,  $.001 par value per share, by a
vote of 3,339,268 shares, or 56% of outstanding  shares in favor,  34,300 shares
against, 4,750 shares abstained, and 2,568,082 shares not voted.

c.   Ratification of Appointment of Moss Adams LLP

Shareholders  ratified  the  appointment  of  Moss  Adams  LLP as the  Company's
independent auditors for the fiscal year ended March 31, 2000.



                                       23
<PAGE>


Item 6. Exhibits and Reports on Form 8-K

(a)      Exhibits

         Exhibit Number            Description
         --------------            -----------
             27                    Financial Data Schedule


(b)      Reports on Form 8-K

The Company filed a current report on Form 8-K on September 13, 1999,  reporting
the $1 million of financing received from Alpine Capital Group LLC.


















                                       24
<PAGE>



                                    SIGNATURE

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                   UBARTER.COM INC.


November 12, 1999                  /s/ Steven M. White
                                   --------------------------------------------
                                   President and CEO



November 12, 1999                  /s/ Kevin R. Andersen
                                   --------------------------------------------
                                   Kevin R. Andersen
                                   Chief Financial Officer





<PAGE>


                                  EXHIBIT LIST


Exhibit Number            Description
--------------            -----------
     27                   Financial Data Schedule